Penang, take a leaf out of HK’s Star Ferry

KUALA LUMPUR: The loss-making ferry service linking Penang island to Butterworth is expected to be a major focus of the new owner of Penang Port Sdn Bhd (PPSB), the company operating the port and ferry, as it has previously been a stumbling block to its initial public offering.

While doing away with the iconic ferry service is definitely a no-no since it is regarded as one of Penang’s most famous heritage entities, some industry observers are suggesting that Penang’s ferry operation should take a leaf out of Hong Kong’s Star Ferry, or the ferry system from Sydney Harbour to Manly in Australia, in order to become commercially viable.

Shipping Association of Malaysia chairman Ooi Lean Hin is of the view that the ferry service could be used solely for the carriage of passengers and light vehicles such as motorcycles and bicycles.

“Times have changed. With the opening of the Second Penang Bridge, there is no necessity to transport [heavier] vehicles any longer,” he told The Edge Financial Daily.

“[Instead], the ferry operator (PPSB) could redevelop the vehicle marshalling yard (for vehicles waiting for the ferry) at both the Sultan Abdul Halim ferry terminal in Butterworth and the Raja Tun Uda ferry terminal at Weld Quay in George Town on the island into bus and taxi stations, along with retail shops, including food and beverage outlets,” Ooi said.

He also suggested replacing the ageing ferries with fuel-efficient craft such as those offered by Hong Kong’s Star Ferry, which not only serve to transport passengers but are an attraction in their own right.

“Better service would in turn attract more riders and help the ferry service to build a profitable business,” said Ooi.

Former Bukit Bendera MP, Liew Chin Tong, concurs.

Liew believes the ferry service provides tremendous potential for growth and should be incorporated as part of the state’s transportation system just like in Hong Kong, and not be treated like a “step child”.

He said PPSB should consider investing in larger boats to ferry passengers more efficiently and comfortably, which would provide better returns for the company in the long run.

Liew cited Eastern & Oriental Bhd (E&O)’s private charter water limousine service which started in September last year. The service plies the waters between the Straits Quay Retail Marina and the E&O Hotel in Penang.

Under the service, E&O Hotel guests and selected patrons of the Straits Quay Retail Marina can buy tickets at RM10 for a return trip.

When contacted by The Edge Financial Daily, PPSB chairman Datuk Mohd Sidik Shaik Osman said there are no plans to revamp the ferry service for now.

“We just took over three months ago. Whatever changes [that need to be carried out] would need the approval of the [various] stakeholders,” he said.

In January, Seaport Terminal (Johore) Sdn Bhd, controlled by tycoon Tan Sri Syed Mokhtar Al-Bukhary, assumed ownership of PPSB after edging out four other companies to privatise the port in a restricted tender process.

Under the deal, Seaport Terminal (Johore) is to undertake PPSB’s social obligations which include providing the ferry service, settling the port’s debts of over RM1.2 billion, paying for the capital dredging cost (dredging of the seabed from 11.5m to 14.5m) and providing capital injection to develop the area surrounding the port.

PPSB was previously a wholly-owned subsidiary of the Minister of Finance Inc. Under its previous owner, PPSB had planned to hive off its ferry operation as early as 2004 as the service has been dragging down the company’s overall profits from the start.

The ferry service reportedly cost PPSB to lose RM16 million a year. The problem is said to be its fares which are priced too low. Passengers pay RM1.20 for a one-way trip, while the fare for a car is RM7.70.

Founded in 1920, the Penang ferry service is the oldest in the country. PPSB currently operates a fleet of eight ferries.

This article first appeared in The Edge Financial Daily, on April 28, 2014.


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